Despite the fact that banks such as HSBC announced record profits yesterday, according to a recent report conducted by the Forum of Small Businesses, the SME and company formation sector are still not receiving finance.
When the government stepped in to privatize RBS as a result of its imminent collapse, many people felt that at least the taxpayer – who, had funded the deal – would have more control over there activity. However, a year on it seems that businesses are still unable to access the finance they so badly need, with some even using their personal credit to keep their company a float.
While recent figures reveal that lending figures have increased month on month in 2010, they are still extremely down if you look at them year on year. Many company owners also feel that banks have raised they administration and overall lending cost of finance. All of which makes doing business in the UK more challenging.
Nicola Hall, head of enterprise at the FSB, comments; “The fact is that since the recession began small businesses and recently formed companies have had to deal with a ‘double whammy’; declining consumer spend and no access to finance. While the government has made the first steps in address the issue – with Vince Cable and George Osborne’s Finance White Paper – they haven’t gone far enough to really make an impact.”